Fashion retailer Francesca’s plans to permanently cease operations following a “periodic progression” of store closures and layoffs that began last week, per a Federal Worker Adjustment and Retraining Notification Act document filed in Texas.
The closure of the retailer’s corporate home base in Houston, Texas, will impact 202 employees on a rolling basis, according to the notice dated Jan. 14 and signed by Chief Stores and Culture Officer Christine Kaighn.
Francesca’s operates over 450 stores across 45 states, according to its website. Two locations that Retail Dive visited within the past week — one in Maryland and one in Maine — had storewide sale signs posted.
Francesca's did not respond to requests for comment. When called, a customer service representative for the retailer referred Retail Dive to the company's website that states all sales are final as of Jan. 14.
The retailer moved to cease operations after receiving a notice of default from its lender on Jan. 8. This followed news at the end of December that an investor who previously pledged to supply operating funds to support Francesca’s through January would no longer provide the necessary capital.
Francesca’s also learned that funding was terminated by lenders for two of its major suppliers, making it impossible for Francesca’s to receive products from those suppliers.
“This sudden and unforeseen series of events was not what the Company had hoped for or expected and unfortunately as a result, the long-term viability of the Company is impossible,” Kaighn said in the notice.
Francesca’s had been in discussions with at least six investors to secure alternative funding and capital investments.
The news comes a few years after Francesca’s was acquired by TerraMar Capital and Tiger Capital after an auction was conducted in Chapter 11 bankruptcy proceedings. At the time, TerraMar had committed to keeping at least 275 Francesca’s stores open after the company had already closed nearly 200 locations.
TerraMar and Tiger did not immediately respond to requests for comment from Retail Dive.
